FINRA Has Launched An Investigation Into Broker Dealers’ With China Based Clients
In late October 2025, FINRA notified its members that it has launched an investigation into broker dealers that have worked on IPO’s involving small-cap companies based out of China. FINRA has specifically indicated that it is concerned with potential market manipulation.
FINRA’s investigation is the latest in a string of actions by US regulators and quasi governmental organizations concerned with access to U.S. markets by China based companies. In September, Nasdaq proposed to adopt additional listing criteria for companies primarily operating in China, including Hong Kong and Macau. The additional listing standards would require that all China based companies complete a minimum of a $25 million capital raise in a firm commitment public offering to go public on the Exchange (see HERE).
In June, 2025, the SEC published a concept release and request for comment on the definition of a Foreign Private Issuer (FPI) and related rules, clearly indicating that the prior definition is not suited to the
